Collie v Merlaw Nominees Pty Ltd (in liq)

[2003] VSCA 40

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 6265 of 1991

GEOFFREY MALCOLM COLLIE (AS TRUSTEE OF TERRACOL TRUST)
	Appellant
v.
MERLAW NOMINEES PTY. LTD. (IN LIQUIDATION)	Respondent

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JUDGES:	ORMISTON, BATT and VINCENT, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	7-10 October
DATE OF JUDGMENT:	24 April 2003
MEDIUM NEUTRAL CITATION:	[2003] VSCA 40

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TRUSTEES – Breach of trust – Equitable compensation – Date at which to be assessed – Beneficiary to do equity – Compensation limited to loss by reason of breach – Extraneous claimed adjustments excluded.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr C.M. Maxwell, Q.C. Mr M.D. Murphy	Howie & Maher
For the Respondent For Damian John Nolan intervening by leave	Mr R. S. Randall Mr A.J. Myers, Q.C. Mr P. Zappia	D.E. Phillips Voitin Walker Davis

ORMISTON, J.A.:

1. In this appeal I agree that the appeal should be dismissed for the reasons appearing in the judgment of Batt, J.A.

BATT, J.A.:

1. This is an appeal by Geoffrey Malcolm Collie (as trustee of the Terracol Trust), the plaintiff below, from a final judgment given in his favour by Byrne, J. on 24 November 1999 against the respondent, Merlaw Nominees Pty. Ltd., the first defendant below, in the sum of $92,784.74 together with damages by way of interest in the sum of $105,835.61.  The first-mentioned sum was awarded as equitable compensation for breach of trust and the appellant complains that the award and consequently the pre-judgment interest should on various grounds have been higher.

1. The principal facts relevant to this appeal are set out in the reasons of Ormiston, J.A. in the appeal Nolan v. Collie, in which judgment is being given at the same time as in this appeal, and need not all be repeated here.  A little repetition, however, will be unavoidable and it will also be necessary to mention various other, subordinate, facts when certain of the disputed individual items of addition or deduction are being considered.  So far as possible, the same terminology will be adopted in these reasons as in those in Nolan v. Collie. 

1. The only respondent to the appeal is Merlaw. It went into liquidation subsequently to the judgment appealed from and Mr. G.M. Collie on 14 April 2000 obtained from the Court of Appeal leave to proceed with the appeal pursuant to s.471B of the Corporations Law. When the appeals were called on for hearing, counsel appeared for Merlaw, but sought to be, and was, excused by the court from attending, at least until judgment was given, the liquidator agreeing to be bound by any order of the court. In those circumstances, counsel appearing for Mr. Nolan in the other appeal sought leave to intervene on his behalf in this appeal on the

grounds that, since the declarations made in the indemnity action by Warren, J. were ambulatory, the outcome of this appeal had a direct effect on Mr. Nolan’s liability and that there would not otherwise be a contradictor in it.  The application was not opposed and the court granted leave.  No application was made to substitute Mr. Nolan as respondent.

1. Although this appeal is against the judgment of 24 November 1999, Mr. G.M. Collie, besides challenging the reasons for that judgment that were delivered by his Honour on that day, also challenges, as he is entitled to do, reasons given by his Honour on two previous occasions on the way to reaching the final judgment in the proceeding as ultimately given on 24 November 1999.  It is accordingly necessary to refer to the course of the proceeding and to summarise or set out, so far as material, those earlier reasons.  The first set of reasons is indeed his Honour’s primary judgment in the proceeding and, as will appear, in it he stated both the foundation for the equitable compensation he eventually awarded and the principles by reference to which the compensation was to be, and ultimately was, assessed. 

1. In the final pleading of his claim in the compensation action, which is to be found in the second further amended statement of claim (“the statement of claim”), Mr. G.M. Collie as trustee of the Terracol Trust claimed relief against the first defendant, Merlaw, arising out of its granting to the ANZ bank of the “all moneys” mortgage over Jolimont.  The claim was pleaded on three bases – breach of implied terms of the contract of sale of Jolimont between Merlaw as vendor and Terramont as purchaser; breach of the trust alleged to have arisen on the making of the contract of sale; and breach of a constructive trust alleged to have arisen from the common intention, belief and knowledge of Merlaw and Terramont with respect to Jolimont.  After a trial of 13 days, Byrne, J. in reasons published on 22 December 1998[1] upheld the claim on the second basis (which he called the purchase trust), but held that it failed on the other two bases.  It is to be noted that, as to the third basis, his Honour stated[2] that counsel for the plaintiff in argument applied by analogy to the trust asserted the law imposing fiduciary duties on joint venturers and that, when confronted with the difficulty that Merlaw and Terramont were not the joint venturers, relied on equity’s intervention to adjust the legal rights of joint venturers where their arrangement breaks down without fault.  That, however, was not the case pleaded, his Honour said.  Since the claim on the basis of the constructive trust was not presented in final submissions on any other basis, his Honour did not consider it further.

   [1][1998] VSC 203.

   [2]At [80] and [81].

1. It is convenient to interrupt the recital of his Honour’s reasons at this point to consider the implications of what has so far been summarised and the attitude of the several parties to it.  For the purposes of the present appeal, it is significant that the complaint of Mr. G.M. Collie as pleaded, and as determined by Byrne, J., was confined to the granting by Merlaw of the “all moneys” mortgage.  That was the case, and the only case, that Merlaw was required to meet.  It is true that in paragraph 18 of his above pleading Mr. G.M. Collie alleged that in breach of the contract of sale Merlaw failed, refused and/or neglected to complete the contract and to transfer the land to Terramont and that by clause J of the prayer for relief he sought damages against all defendants.  But the particulars under paragraph 34, which contains the only allegation of the suffering by the plaintiff of loss and damage, are expressly confined, in sub-paragraph (a), to “the breach of trust, alternatively the duty” and, in sub-para.(b), to the appropriation by the ANZ bank of the proceeds of its sale of Jolimont to the indebtedness of Merlaw.  (The “duty” mentioned is clearly a reference to duties alleged against the third defendant, Mrs. Nolan, in paragraph 31 to exist and in paragraph 32 to have been breached.)  There was, then, no claim for relief for repudiation or non-performance of the contract of sale.  Paragraph 18 was, thus, no more than part of the narrative.  More particularly, there was no allegation in the pleading of the exclusion on 14 April 1989 by Merlaw (through Mr. Nolan) of Terramont or Mr. Ian Collie or his family or companies from possession of the ground floor of Jolimont[3], or of the denial by Mr. Nolan (no doubt on Merlaw’s behalf as well as his own) by letter of 6 October 1989 to the ANZ bank that Mr. Ian Collie or his family or companies had any interest in Jolimont.  It is true that in paragraph 7(c) of the reply dated 7 December 1998 to Merlaw’s defence Mr. G.M. Collie referred to the April 1989 event, but this was only by way of response to Merlaw’s allegations that the grant of relief would be inequitable.  It is also true that paragraph 29D(b) of the statement of claim contains the general allegation that “in breach of the constructive trust” Merlaw dealt with Jolimont entirely for its own benefit and without regard for the interest held by it on trust for the plaintiff.  But I agree with his Honour’s view, expressed during argument[4] and in the context of there having been numerous amendments to the pleadings, that paragraph 29D(b) is not an allegation of the April 1989 event or the October 1989 letter as a breach of trust, but rather must be taken as being another way of expressing the complaint about the granting of the “all moneys” mortgage.  That is confirmed, if confirmation be needed, by the fact that the declarations sought against Merlaw in clause B of the prayer for relief are confined in terms or by their subject matter to the mortgage and its effect. 

   [3]Counsel for Mr. Nolan maintained before this Court that his Honour made no finding that Mr. Ian Collie (or Terramont) was excluded in April 1989, because, rejecting the argument for a constructive trust based on that, the judge did not need to do so. His Honour undoubtedly found the primary facts relating to the changing of the locks (and the sending of a letter of 6 October 1989 mentioned later) and that Mr. Ian “Collie saw himself as effectively excluded” (para.[39]). But it may be that, strictly, counsel is correct as regards the paragraph of his Honour’s reasons relating to April 1989. However, the concluding sentence of the paragraph in which his Honour deals with the letter of 6 October 1989 (namely, para.[42]) reads, “Having effectively obtained possession of the whole of the premises in April, he [Nolan] and Merlaw now denied the title of Terramont to them”, and the next paragraph refers to Mr. Nolan’s seeking over the next year or so to maintain that position against, amongst others, entities associated with Mr. Ian Collie. I regard as quite neutral his Honour’s exclusion in para. [15] of his judgment of 26 March 1999, [1999] VSC 84. Although the conclusion I reach about the relevance of these events means that a definite finding or view is not required on the present point, it must be said that the word “effectively” is a broken reed for counsel to lean upon.

   [4]At AB-B1240.

1. Merlaw has not by cross-appeal against the ultimate judgment sought to challenge his Honour’s conclusions that there was a purchase trust and that Merlaw acted in breach of it or his Honour’s upholding of Mr. G.M. Collie’s title to sue.  Nor has Mr. Nolan sought leave as a non-party to cross-appeal in order to do so.

1. Mr. G.M. Collie, however, it is convenient to note at this point, seems in grounds 3 and 7 of his notice of appeal to seek to challenge his Honour’s rejection of the constructive trust basis for his claim (or perhaps even to assert a new basis of claim), no doubt with a view to the additional basis being used as a springboard for the calculation of a greater amount of compensation.  Those grounds read:

“3.The learned trial judge committed an error of law in failing to recognise that upon the signing of the contract of sale Merlaw became a fiduciary and was liable to account to the beneficiaries including the Appellant for any benefit or gain received by it in circumstances where there was a conflict of interest and fiduciary duty.”

“7.The learned trial judge committed an error of law in failing to construe a trust in favour of Terramont in circumstances where Merlaw was in breach of the purchase trust, had excluded Terramont from the property, had refused to sell or rent out the property and or had dealt with the land for its own benefit by its exclusion of Terramont, obtained the benefit of the security value of the property, refused the tender of the balance of the purchase [moneys], and recovered the chattels prior to the mortgagee sale.”

1. As to ground 3, whilst the allegations in the statement of claim that Merlaw held Jolimont on trust involved that it was a fiduciary and whilst there is in the prayer for relief a claim against all defendants for an account of profits, that pleading clearly did not invoke the rule that a fiduciary is liable to account for any benefit received when there was a conflict of interest in fiduciary duty.  To elaborate, paragraph 29D(b) is, for the reasons already given, confined to the dealing with Jolimont by way of the “all moneys” mortgage.  Further, the account of profits sought from Merlaw clearly relates, and relates only, to the surplus consisting of the amount by which the sale proceeds exceeded the amount due to the ANZ bank under the bill facility, for which it is alleged in substance in paragraphs 25A and 29D(c) that Merlaw failed to account to the plaintiff.  I would have concluded, therefore, that ground 3 cannot be upheld or, perhaps more accurately, cannot be entertained.  But this is unnecessary, for, as stated in the next paragraph, the claim of a fiduciary duty was expressly abandoned by senior counsel for Mr. G.M. Collie during the hearing of the appeals. 

1. Ground 7 seeks to set up a constructive trust arising from circumstances different from those alleged in support of the only constructive trust pleaded (excluding, for this purpose, the purchase trust).  At first sight they appear to be different also from those relied on, according to his Honour, in the only submission to him contending for a constructive trust, but it may be that they are substantially the same as those relied on for Mr. G.M. Collie in final submissions to his Honour, both written[5] and oral[6].  However, the essential facts on which this constructive trust depends are the asserted joint venture nature of the arrangement made and the breakdown of the arrangement by the asserted exclusion of Mr. Ian Collie from Jolimont through the changing of the locks in April 1989, which, it was submitted below and in writing on appeal, would have led equity to impose – and should have led the judge to hold there was – a constructive trust from that point onwards.  That contention, if accepted, makes April 1989 (when, the evidence unambiguously showed, Jolimont’s value was $900,000) a critical date.  Indeed the written submissions for Mr. G.M. Collie below stated, “The events of April/May 1989 are central to this case.”[7]  If so, it is beyond comprehension that they are not pleaded in the statement of claim.  There were real problems facing the appellant’s reliance on ground 7:  the ground sought to raise a case not pleaded, and, even if there were a relevant arrangement that was in the nature of a joint venture, any consequent constructive trust would, one might have thought, antedate the events of April 1989.[8]  But, again, a firm decision on these points is not required because senior counsel for Mr. G.M. Collie (who had, during his address for him in the appeal by Mr. Nolan, digressed, appropriately, to foreshadow to the court the argument in this appeal assimilating the breakdown in arrangements to the breakdown of a joint venture, with the interest of Terramont being measured at the date of the breakdown) informed the court the next morning that the joint venture argument for fiduciary duty, constructive trust and (consequent) compensation would not be pursued in this appeal. 

   [5]Supp. AB 302-307.

   [6]AB-B1225-6 and 1240.

   [7]Supp. AB 302, para.12.

   [8]Compare United Dominions Corporation Ltd. v. Brian Pty. Ltd. (1985) 157 C.L.R. 1. The passage in Bahr v. Nicolay[No.2] (1988) 164 C.L.R. 604 at 654, relied on below, is distinguishable.

1. In their written submissions in reply dated 17 October 2002 counsel for Mr. G.M. Collie pointed out that the abandonment of the argument for a constructive trust founded on the (unpleaded) joint venture did not mean the abandonment of the grounds (or, in my view, the only ground specifically) challenging the rejection of a constructive trust as pleaded in paras.29A-29D of the statement of claim.  That may be accepted.  But it is clear from paras.33, 34 and 36 of those submissions (and indeed from the statement of claim) that the constructive trust still relied on is only another way of characterising the relationship between the vendor and the purchaser under a contract of sale or “a corollary, or a re-statement,” of the purchaser’s equitable interest.  That is, it is in essence the purchase trust upheld by his Honour.  It follows that no further or different consequences would result from upholding this constructive trust argument, whether in addition to or in place of the “purchase trust”.  It therefore need not be considered further.

1. To return to his Honour’s reasons:  in the course of holding that the granting by Merlaw of the “all moneys” mortgage to the ANZ bank was a breach of the purchase trust, his Honour said[9]:

“Merlaw cannot, as between itself and Terramont, enjoy the benefit of its breach.  In this case, the benefit is that, upon sale by the Bank it obtained the discharge of part of its debt to the Bank which debt was not related to the Jolimont property.”

He concluded his consideration of that breach as follows[10]:

“Following the sale by the Bank the proceeds were applied by it in reduction of the Merlaw account.  This meant that the interests of the Terracol Trust and the Terranol Trust were defeated at least to the extent that they were deprived of their equitable interest in the surplus after payment of the liabilities of Merlaw which they had assumed under the contract of sale to its mortgagee, Ogge Nominees, and after 24 December 1987, the Bank.”

[9]At para.[77].

[10]At para.[79].

1. Then, after rejecting four affirmative defences of Merlaw and Mr. G.M. Collie’s claim against Mrs. Nolan, his Honour turned finally to quantum.  Since in this part of his reasons his Honour laid down and illustrated the principles which governed his assessment of equitable compensation in the proceeding I set it out in full despite its length[11]: 

   [11]Paras.[101] to [105].

“12.     QUANTUM

101. Mr [Ian] Collie prepared a document which he entitled Equity Reconciliation and which became Exhibit 34.  In it he deducted from the sale price obtained by the Bank of $750,000, sale costs of $20,632, the amount of the bill facility of $300,000 and the amount of the Terramont overdraft of $15,581, giving a net surplus for the two trusts of $413,787.  It was put on the plaintiff’s behalf that one half of this sum is the equitable compensation payable by Merlaw to him in order to cure the breach of trust to the Terracol Trust alone.  I agree in principle, subject to two qualifications.

102. First, where the Terracol Trust seeks equitable compensation it must itself do equity to Merlaw.  Under the contract of sale Terramont agreed to assume Merlaw’s responsibilities to its mortgagee.  To this I would add its responsibility to Merlaw’s substitute mortgagee for the sums which Terramont agreed that Merlaw might obtain.  This appears to have been accepted in Mr [Ian] Collie’s reconciliation inasmuch as credit is given for the full $300,000 facility which was granted in July 1988.  Merlaw incurred other obligations to its first mortgagee, Ogge Nominees, other than the repayment of the principal debt.  These comprise payments of interest as well as legal and other costs associated with the discharge of the mortgage.  Many, if not all of these have been paid by Terramont.  Further, when the ANZ facility was established, Merlaw incurred obligations to the Bank in the way of fees and interest each time the $265,000 bills, and later the $300,000 bills were rolled over up to July 1989.  These sums, insofar as Terramont has not paid them, must also be brought to account.  Finally, in the period when the $300,000 bill liability remained as part of the overdraft in the Merlaw account, Merlaw incurred obligations to the Bank in the nature of interest and fees which are referable to that part of its overdraft.  These too, inasmuch as Terramont has not paid them, should be brought to account.  The amount of these I shall leave to be calculated by counsel.

103. Second, Mr [Ian] Collie in his reconciliation gives credit for the Terramont overdraft as it stood in April 1989.  This date may have been fixed as the appropriate date when the negotiations for the purchase by Mr Nolan or his entities of the Terracol interests broke down.  To my mind, however, this is not the relevant date.  As at the date of the sale of the property, the Terramont overdraft stood at $25,017.57.  This was subsequently paid by Merlaw.  It may be said on behalf of Terracol that this represents the balance after the inclusion of payments for expenses under the second agreement, that is, the agreement relating to outgoings and common expenses with which I am not presently concerned.  It may be said on the other hand that it represents the balance after the two men or their entities had made contributions, which contributions, on balance, favoured Mr Nolan’s interest.  It may have been, but was not, said too that since April 1989 Mr Nolan enjoyed the possession of the whole building.  My present concern is not with the contributions to Terramont which were made by the two men or their entities; it is with the relationship between Terramont and Merlaw.  Terramont should have itself satisfied its obligations to the Bank and not left it to Merlaw to do so.  I am of opinion that the two trusts must therefore give Merlaw credit for the sum of $25,017.57. 

104.It follows that the proper measure of compensation is to be calculated as follows.  From the sale price of $750,000 must be deducted the costs of sale in the sum of $20,632, the sums borrowed from the Bank in the sum of $300,000, the sums paid by Merlaw under the mortgages to Ogge Nominees and to the Bank for which it has not received payment from Terramont.  These sums remain to be calculated.  Finally, there must be deducted the amount of the Terramont overdraft as at the date of the sale in the sum of $25,017.57.  The net proceeds after deduction of these four items reflect the loss to the two trusts as a result of Merlaw’s breach.  One half of that sum would, in the ordinary course, have been paid to the Terracol Trust on about 18 July 1990 when the proceeds of sale were received.  I conclude that this is the amount of equitable compensation payable by Merlaw to the Terracol Trust.

105.The consequence of this is that the plaintiff should have judgment against the firstnamed defendant in a sum which I shall leave to counsel to calculate and agree, and that the third defendant should have judgment against the plaintiff.  I will hear counsel further on the question of costs.”

The reference in paragraph [103] to the second agreement harks back to paragraph [54], where his Honour had said:

“In my view the proper analysis of the arrangement agreed to between the two men is that there would be two or perhaps three agreements.  The first, between Merlaw and the trustee Terramont was for the purchase of the land.  The second related to the contributions which each man or his entities would make to Terramont to enable it to meet its obligations under the contract of sale.  The parties to this second agreement were the two men, although it was probably assumed that the funds would be provided by one or more of the corporate entities within the group of companies which each controlled.  These contributions would include, too, the outgoings which Terramont as purchaser in possession would incur.  It may be that they agreed in February [1985], or perhaps later, that Terramont would also be an appropriate vehicle for the acquisition of equipment for them to share and to pay the costs associated with this.  The distinction between these two agreements is confirmed by the fact that the contract of sale makes no mention of the second agreement and, further, by the fact that its capacity as trustee of the two trusts is mentioned only with respect to the first agreement.”

1. The parties were unable to agree on the amount of compensation to be awarded in the light of his Honour’s reasons.  Accordingly, having been furnished by them with their rival reasoned calculations and with submissions on interest, his Honour heard oral argument on these matters and on costs on 17 March 1999.  On 26 March 1999 he published further reasons[12]. In them he resolved all but two sub-items out of the items of claimed deduction from or addition to the assessment of equitable compensation that remained in dispute (setting out in an annexed schedule the rival amounts and those he arrived at); decided that the plaintiff should be awarded interest under s.60 of the Supreme Court Act 1986 from the commencement of the proceeding as long ago as 26 March 1991; and decided that, even if the amount of compensation proved to be less than $100,000, the plaintiff should have Supreme Court costs. His Honour referred to a master for inquiry and report three questions which he stated in an order ultimately made on 1 April 1999. Master Wheeler in turn received from the parties detailed written submissions on the questions, including a response by the plaintiff, and heard oral argument. He reported on 8 August 1999. It is not necessary to set out his Honour’s or the master’s decisions and reasons on all the items covered in the judgment and the certificate respectively. It will be sufficient to refer to relevant portions in the course of deciding on the items challenged in this appeal. But it may be noted that his Honour mentioned again[13] the different roles played by Terramont in the contract of sale and in the acquisition of equipment, saying that this “creates complications which I have sought to avoid in my judgment”. 

   [12][1999] VSC 84.

   [13]At para.[12].

1. On 24 November 1999, after argument, his Honour gave oral reasons resolving the items dealt with by the master’s report and rejecting an application by the plaintiff to re-open the question of the deduction from the value of Jolimont of the amount of $35,000 by which the ANZ bank facility had been increased in July 1988 (“the uplift”).  His Honour attached to his reasons a schedule showing his decision as to the amount of each disputed item together with the rival amounts for it put forward by the parties.  A copy of the schedule is annexed to these reasons.  It is appropriate to take the same approach to his Honour’s reasons on the disputed items (including the uplift) as is taken in the immediately preceding paragraph in the case of his Honour’s judgment of 26 March 1999, save that it is desirable to quote at this point what is perhaps the most detailed exposition by him of his attempt to “disentangle” in his judgments the two (or three) contracts which he found had been made with respect to Jolimont and the activities to be carried on there.  His Honour said[14]:

“This case has been complicated by the fact that the two men who were ultimately involved, Mr Collie and Mr Nolan, entered into two or perhaps three contracts for the conduct of their businesses.  These contracts, which are identified in paragraph [54] of the December 1998 judgment, included a contract between Terramont and Merlaw for the sale of the land and a contract between the two men or their companies to contribute to their common expenses.  Terramont became the vehicle for this contribution agreement.  It opened a bank account with the ANZ Bank into which the two men or their companies made payments, so that its activities in this respect were revenue neutral.

I have in my judgments sought, as far as possible, to disentangle these two contracts.  The amounts which are properly deductible from the proceeds of sale of the land for present purposes are only those amounts which Terramont, as purchaser, was obliged to pay to Merlaw under the sale agreement.  This task has not been an easy one, first, because the parties themselves did not implement the two agreements as distinct and much of the accounting documentation and reconciliations represented an attempt to fix a balance between them on both bases; second, because the bank had a role as mortgagee of the land from Merlaw under an all-moneys mortgage.  It was also Terramont’s banker.  This meant that from the bank’s point of view, it looked to Merlaw and to the security over the land to meet obligations owed to it by Terramont under its overdraft, by Merlaw in respect of its loan for the financing of the purchase of the land, and by Merlaw or associated companies on other accounts.  For present purposes, I am not concerned with the first and third of these obligations."

[14]AB-D259-260.

1. This appeal is about the quantum of compensation and is largely concerned with matters of detail, if not minutiae.  One issue was, however, treated by counsel as being an issue of principle.  This is the date as at which Jolimont was to be valued in assessing compensation.  There may be said to be another issue of principle, namely, what is the subject matter of the proceeding or the matter complained of in it. 

1. As to this second issue, for the reasons given earlier the subject-matter or matter of complaint was confined to the granting by Merlaw of the “all moneys” mortgage to the ANZ bank in breach of trust.  In particular it did not include the claimed exclusion of Mr. Ian Collie or Terramont from possession, the denial of their title, or repudiation or non-performance of the contract of sale.  The opinion I have expressed accords with, or has as its corollary, his Honour’s statement in his second judgment[15] that the relevant calculation (scil., of deductions to be made in assessing equitable compensation) was “to assess the amount of the unsatisfied obligations of Terramont under special condition 2 of the contract of sale”, being, “relevantly, to indemnify Merlaw in relation to claims by the mortgagee under the Ogge Nominees mortgage and later under the ANZ Bank mortgage.”  Of a similar nature are the statements, with which I agree, made by his Honour in each of his three judgments in the context of the assessment of compensation that of the two (or three) contracts made he was only concerned with the contract of sale, though the presence of Terramont in one and in the implementation of the other (or others) complicated the task of “disentanglement”.[16]  In short, his Honour was not engaged in a general settlement of accounts between Mr. Nolan and Mr. Ian Collie and their respective families and companies. 

   [15][1999] VSC 84 at para.[3].

   [16]The judge’s statement (at AB-D259 in reasons of 24 November 1999) that only those amounts which Terramont as purchaser was obliged to pay to Merlaw under the sale agreement has to be understood in context.

1. The opinion expressed on the second issue, and its corollary abovementioned, will be found to have application when certain of the items raised in this appeal fall for consideration.  But they have an immediate application to the first issue mentioned above.  For it follows from them that neither April 1989 nor October 1989 is a material date or, accordingly, the date as at which Jolimont was to be valued. 

1. Mention has not so far been made of another basis on which it was contended for Mr. G.M. Collie that April 1989 was the appropriate date. This was that Mr. Ian Collie and Mr. Nolan had agreed in that month to discharge the contract and that a written offer by Mr. Ian Collie on 6 April 1989 to “settle” fully for the sum of $225,000 on the basis of the value for Jolimont of $850,000 should be “adjusted” for the increased valuation of $900,000.  The mere statement of the submission as to amount shows that it cannot be upheld:  the offer was not accepted and in any event cannot be used as a starting figure on which to build by way of adjustments.  More importantly, the offer covered all matters in dispute between the two men.  Even if the submission as to amount is disregarded and attention is confined to the appropriateness of April 1989 as the date for valuation, it is clear that, whether or not agreement had been made in principle to discharge the contract, no concluded agreement for that had been reached.[17]  More significantly, none of this was pleaded and his Honour was not required to be concerned with it. 

   [17]As appears from, e.g., [1998] VSC 203 at para. [38].

1. Reliance on the date of 15 February 1990, which was the date for completion under the contract of sale between Merlaw and Terramont, faces for a start the practical difficulty of ascribing a value to Jolimont at that date.  There was only Mr. Burns’ evidence of his valuation as at 21 April 1989, which the judge accepted, and his somewhat imprecise evidence as to trends thereafter, as well, of course, as the evidence, provided by the auction on 18 July 1990, of Jolimont’s value then as being $750,000.  February 1990 is considerably closer to that date than to 21 April 1989, though in the circumstances that is not decisive.  Mr. G.M. Collie, however, relies on his Honour’s passing statement in his first judgment[18] that in February 1990 “the property was worth $900,000 or perhaps a little less if the market had fallen in the preceding 12 months”.  But his Honour, who was not at that point concerned to have a specific figure, did not make a finding whether the market had fallen or express an actual alternative figure.  I should be hesitant to make findings on those points on appeal, though a valuation can never be precise, and though, subject to certain limits, it has been said that a court must do its best to assess damages (to which equitable compensation may loosely be said to be analogous for present purposes):  compare JLW (Vic) Pty. Ltd. v. Tsiloglou[19], where the cases are reviewed, though note Ted Brown Quarries Pty. Ltd. v. General Quarries (Gilston) Pty. Ltd.[20], which concerned the value of a business. 

   [18][1998] VSC 203 at para.[75].

   [19][1994] 1 V.R. 237.

   [20](1977) 16 A.L.R. 23.

1. If one assumes that the practical difficulty I have been discussing can be surmounted, I nevertheless am of opinion that 15 February 1990 is not open to be considered as the appropriate date as at which to value Jolimont and in any event is not that date.  As to the first of those propositions, the date is not mentioned in the particulars in the statement of claim or elsewhere in that pleading.  Further, whilst it is mentioned, along with April 1989 and October 1989, in ground 4 of the notice of appeal as an alternative commencing date for an allowance for use and occupation by Merlaw of Jolimont, there is no substantive ground asserting that the value of Jolimont, from which the assessment was to start, should have been that as at February 1990.  Finally, junior counsel for Mr. G.M. Collie conceded in argument that Byrne, J. was presented by counsel with a choice between April 1989 and July 1990, and Ex.34 (Mr. Ian Collie’s equity reconciliation re Jolimont) certainly supports that.  He also conceded that no table employing February 1990 had been submitted to the judge for Mr. G.M. Collie. 

1. As to the second of the propositions above (going to the merits of the matter if the February 1990 date is open for consideration), February 1990 does not have significance for the mortgage itself.  In particular, that was not the date for redemption of the mortgage.  Now, the loss which was to be compensated is the loss from the breach of trust which occurred on 24 December 1987.[21]  In my view, that loss did not come home to the Terracol Trust until Jolimont was sold on 18 July 1990.  Thus his Honour was, I consider, correct in taking that date as the appropriate one as at which to value Jolimont.  This conclusion derives support from the principle, recently re-affirmed by the High Court in Youyang v. Minter Ellison Morris Fletcher[22], that the quantum of compensation is to be assessed at the time of trial with the full benefit of hindsight.[23]  But it must be recognised that the reason for having regard to post-breach events is here quite different from the reason for doing so in Youyang and the cases cited in it. 

   [21]It was not suggested by either counsel that this was the appropriate date for valuing Jolimont.

   [22][2003] HCA 15 at para [35].

   [23]Target Holdings Ltd. v. Redferns [1996] AC 421 at 437 and Canson Enterprises Ltd. v. Boughton & Co. [1991] 3 SCR 534 at 555, cited in Youyang at para [35].

1. Mr. G.M. Collie contended that, assuming (as I hold to be correct) that compensation was to be assessed by starting from the proceeds of the sale of 18 July 1990, the trial judge failed adequately to compensate him for the damage flowing from the breach of trust by Merlaw. And so I come now to the disputed items in the schedule to his Honour’s judgment of 24 November 1999.  On these items, besides having the notice of appeal and addresses by counsel, the court has been inundated with paper.  We have received an outline of argument for the appellant; one for Mr. Nolan; a supplementary submission for the appellant on quantum dated 9 October 2002; a substituted addendum[24] to the appellant’s notice of appeal with an attached schedule corresponding to his Honour’s schedule but showing the amounts which Mr. G.M. Collie contended for under each of the four dates for valuation discussed above; a (substituted) submission in reply dated 17 October 2002; and, on 25 October 2002, a response for Mr. Nolan to the substituted schedule to the notice of appeal.  In these documents the appellant and Mr. Nolan make, not without repetition, numerous assertions pro and con concerning the disputed items.  I have considered all these assertions, but, having regard to the nature of the dispute and the task presented to this Court, I shall on the whole deal only with assertions I regard as decisive.  I confine myself naturally to the items which, as I understand it, are still in dispute.  The items below are numbered by reference to the schedule to his Honour’s judgment of 24 November 1999.  Before the disputed items are examined, it may be noted that little argument was directed to the principles on which equitable compensation is assessed, recent statements of which are to be found in Youyang, Target Holdings[25], Maguire v. Makaronis[26] and Hill v. Rose[27].  Counsel for Mr. Nolan did, however, stress that the liability of a defaulting trustee is to pay sufficient compensation to restore to the beneficiary or the trust estate what has been lost by reason of the breach of trust, but no greater or other compensation, citing Target Holdings[28]  Since argument concluded, the High Court in Youyang[29] has stressed the importance of the causal connection denoted by the expression “by reason of”.  This requirement has a pervasive underlying relevance in what follows.  .

   [24]Filed (in substitution for an earlier version) on 14 October 2002 by leave as the notice of appeal failed to state, as required by the Rules, the judgment or order sought in place of that of his Honour.

   [25]At 432, 434, 436, and 437-439. 

   [26](1997) 188 CLR 449 at 469-470.

   [27][1990] VR 129 at 143-144.

   [28]At 432.

   [29]At paras [43] – [44] and [46].

ANZ Facility – The Uplift

1. Although in the submissions in reply Mr. G.M. Collie treated this as a new item 17.2, it is convenient to deal with it here.  Despite a suggestion to the contrary, Mr. Ian Collie agreed with Mr. Nolan to increase the facility to $300,000.[30].  Further, in his reconciliation, Ex 34, which his Honour in his judgment of 22 December 1998[31] agreed with in principle subject to two qualifications, Mr. Ian Collie allowed for the deduction of the full $300,000 from the value or sale proceeds of Jolimont without any off-setting or addition of $35,000.  Thus, the net deduction of $35,000 was conceded below.  (I would not, however, use against Mr. G.M. Collie as concessions documents prepared by him or his son after 22 December 1998, as I agree with the submission for him in reply that his Honour had in the concluding paragraphs of his judgment of that date effectively precluded argument against the matters he there laid down, including the amount of the mortgage to be deducted from the sale proceeds.)  Notwithstanding the references to the total facility of $300,000 in the concluding paragraphs of his Honour’s reasons, counsel for Mr. G.M. Collie did on 1 April 1999 and on 24 November 1999 seek before his Honour to have the figure of $300,000 reduced, directly or indirectly, by $35,000.  His Honour refused to let the matter be re-opened.  The main statement of his reasons was made on the later date.  The judge had, in my opinion, been correct when he held in his first judgment in substance that, Terramont having agreed in the contract of sale to assume Merlaw’s obligations under the Ogge Nominees mortgage, the agreed replacement of that mortgage by the ANZ bank mortgage and the subsequent agreed increase in the ANZ bank facility meant that Terramont was responsible to the ANZ bank for the full amount of the facility and that Terramont, and so Mr. G.M. Collie, had in the assessment of compensation to allow a deduction of the full amount.  The question then is whether Terramont, and so Mr. G.M. Collie, are entitled in the assessment of compensation to a credit or addition of $35,000.  For Mr. G.M. Collie, it was argued that there was this entitlement because, that sum having been paid to Merlaw in July 1988 to go against the imbalance in contributions by Mr. Nolan and Mr. Ian Collie, Merlaw would otherwise receive the benefit of the sum twice.  Quite apart from the concession referred to earlier, his Honour was, I consider, correct in taking the view on the merits that the point now raised went to the state of accounts generally between the two men and their interests, that is, that it did not relate to the obligations originally assumed under the contract of sale and extended by agreement, but related rather to what his Honour described as the second agreement.  Accordingly this point of appeal fails.  I would add that, like his Honour, I am not at all sure that on proper analysis there is here a double deduction or benefit in any case.

   [30]A.B. – B177 (Mr. Ian Collie’s evidence in chief).

   [31][1998] VSC 203 at para [101].

Terramont Overdraft

1. In a passage from his initial judgment[32] set out earlier, his Honour decided for the reasons he gave, though not, I think, without some disquiet, that the amount of the Terramont overdraft to be deducted was the amount as at 18 July 1990, namely $25,017.57, not the amount as at April 1989 of $15,581 that had been allowed by Mr. Ian Collie in his reconciliation, Ex.34.  For reasons I have given in relation to the uplift, the appellant did not thereafter concede the correctness of his Honour’s figure. 

   [32][1998] VSC 203 at para.[103]. See also the second judgment, [1999] VSC 84 at para.[12].

1. The appellant submits that he has been required to give credit for the increase in the overdraft occurring while Terramont was out of possession and arising from the inclusion of items referable to Terramont’s role as service provider.  I have much sympathy with this submission, but in the end I think that it cannot prevail and that Byrne, J.’s reasons are correct.  His Honour was concerned only with the first agreement, the contract of sale, and the purchase trust arising out of it.  The real accounting is between Merlaw and Terramont (not Mr. Nolan and Mr. Ian Collie) and then derivatively between Merlaw and Mr. G.M. Collie.  It is accepted that the ANZ bank was entitled to look to Merlaw to satisfy Terramont’s overdraft[33], that Merlaw did ultimately do that, and that in doing equity to Merlaw Terramont must as a general proposition allow credit for Merlaw’s satisfaction of the overdraft, so that, if the date of valuation were April 1989, the whole of the overdraft at that date should be credited to Merlaw.  To argue that to allow as well the subsequent increase to the date held to be the appropriate date of valuation is inequitable or unfair seems to me to invoke the other agreement (or agreements), between the two men, if not also to depend on a claim of dispossession not made in the pleadings, and thus to trespass into an area that was, as I have stated earlier, not before his Honour. 

   [33]His Honour’s statements in his reasons of 24 November 1989 (AB-D260), set out earlier, that “For present purposes” he was not concerned with the obligations owed to the bank by Terramont under its overdraft (for which the bank looked to its security over the land) is to be confined to the context in which it was made, as indeed appears from it, for his Honour had in his first judgment had regard to the Terramont overdraft. 

Moneys re ANZ

(i)       Bill Facility

(ii)      Overdraft

1. Item 7 concerns payments made by Merlaw to the ANZ bank, first in respect of the facility and then in respect of that part of Merlaw’s overdraft which resulted from the later addition of the debt under the facility.  Since Terramont had, as explained earlier, assumed Merlaw’s liability to the ANZ bank as substitute mortgagee it was bound to allow a credit to Merlaw in the assessment of equitable compensation for the net payments made by Merlaw to the ANZ bank in discharge of what was, as between Merlaw and Terramont, the latter’s obligation. 

1. Item 7 is in two parts, relating respectively to the bill facility and the overdraft.  As to the first, Mr. G.M. Collie contended that certain payments had been made direct to Merlaw or the bank by Terramont or on its behalf or at its direction, express or implied, in or towards the discharge of the obligations of Merlaw to the bank.  Any such payments would reduce the credit to be allowed to Merlaw under this item.  Merlaw claimed, and the judge found or accepted, that in the period from December 1987 to 15 February 1989 it had paid $52,412.62 in respect of the facility.  Mr. G.M. Collie claimed that by reason of various payments the credit was reduced to nil.  His Honour in his second judgment and, after the master’s report, in his third judgment adjudicated upon the various payments put forward by Mr. G.M. Collie, concluding ultimately that the credit to be allowed to Merlaw for that period was $44,021.62.  The appellant now seeks to have that sum reduced, no longer to nil, but by $23,991.92 (as is made clear by Item 17.1 in the schedule to the substituted addendum to the notice of appeal).  The latter sum is made up of three payments made by Mr. Ian Collie or a company of his in April and July 1988 to Terramont and found by the master to have been used by the latter to reduce its overdraft.  In effect the payments are contributions by or on behalf of the Terracol Trust to the vehicle Terramont.  The basis of the appellant’s claim for this reduction is that similar payments by Mr. Nolan (more accurately, however, Merlaw) to Terramont were allowed by his Honour under Item 12.  In his judgment of 24 November 1999 his Honour refused to reduce the credit in favour of Merlaw by the amount of these three payments, on the ground that they were made to Terramont to enable it to meet its obligations as service provider.  His Honour had in his second judgment[34] allowed Merlaw a credit under Item 12 for two payments by it to Terramont totalling $53,300 made to reduce the latter’s overdraft.  He had done so for the same reasons as he had earlier allowed the credit for the amount of the Terramont overdraft as it stood at the date of sale of Jolimont.  Again, as it seems to me, his Honour had had some disquiet in allowing the credit under Item 12, for he said that the payments may have been unconnected with the relationship of vendor and purchaser which existed between Merlaw and Terramont and he referred to the complications that Terramont’s dual role caused.  In my opinion, his Honour was correct to decline to reduce the credit under Item 7(i) as the three payments were contributions on behalf of the Terracol Trust to the funding of the vehicle Terramont in its capacity as service provider.  Whether his Honour was correct to allow Merlaw the credit under Item 12 depends on whether the payments were made by Merlaw in its own right or were in truth contributions on behalf of Terranol.  That question was not debated before us, Item 12 not being challenged in this appeal.[35] 

   [34][1999] VSC 84 at para.[12].

   [35]This is elaborated below under the heading “Miscellaneous”.

1. As to the overdraft, the only amount now in dispute appears from the appellant’s supplementary submission on quantum to be the sum of $8,640.47.[36]  In his second judgment[37] his Honour had indicated that the two amounts making up this sum were “presumably” the bank’s legal costs of enforcing its mortgage security, for which Merlaw was liable to the bank and which, therefore, Terramont was bound to pay.  His Honour expected that they would be included under Item 7(ii).[38]  The master queried whether his Honour had actually found that the sum was referable to costs under the mortgage.  In his third judgment his Honour made that clear and allowed the credit in favour of Merlaw. [39]   The appellant’s complaint on appeal is that his Honour was wrong to allow the costs of enforcement as the mortgagee’s sale was brought about by the “all moneys” nature of the ANZ bank’s mortgage, that is, by Merlaw’s very breach of the purchase trust.  But his Honour did not, as I read his first judgment, make a finding that that was so and I am not satisfied that it was so.  Rather, as counsel for Mr. Nolan submitted, the bank having in July 1989 refused to “roll over” the facility and the facility not having been repaid, the bank was empowered to sell Jolimont by reason of Terramont’s failure to honour its obligations to Merlaw so far as they extended to the facility and Merlaw’s failure to honour its obligations under the facility to the bank.  I would therefore not uphold the complaint made. 

   [36]The substituted addendum to the notice of appeal, filed on 14 October 2002, that is, after oral argument, seems also to contend that, if interest on the overdraft to July 1990 is itself allowed, other items ought to be allowed to the appellant.  That was not developed before us and I would not entertain the contention, having been raised at the last moment.

   [37][1999] VSC 84 at para.[11].

   [38]Possibly a new category, Item 7(iii), might have been more appropriate. 

   [39]AB-D260-261..

Rates

1. Between 11 April 1989 and 15 May 1990 Merlaw paid council and MMBW rates and land tax on Jolimont in the total sum of $8,367.28.  Byrne, J. held in his second judgment[40] that that was an amount for which Merlaw was entitled to look to Terramont since they were payable by Merlaw to the bank under the terms of the mortgage, the obligations under which Terramont had assumed.  His Honour therefore allowed the credit to Merlaw for the amount.  It seems common ground that the mortgage required Merlaw to pay rates and land tax on Jolimont, but the appellant contends that the credit should not have been allowed because from 14 April 1989 Jolimont was completely in the possession of Merlaw and Terramont and, correspondingly, Mr. Ian Collie and his interests, were deriving no benefit from the property. Despite the submissions for Mr. Nolan, I would allow the complaint about this item to be raised although the reference to rates in ground 9 is only indirect.  However, in my opinion, the complaint fails, for his Honour’s reasoning, in ascertaining whether the payment of rates and land tax was an obligation of Merlaw under the mortgage taken over by Terramont, cannot be faulted.  The appellant, on the other hand, in seeking to rely on Terramont’s being out of possession, a matter admittedly between Terramont and Merlaw, seeks to go outside the appellant’s pleaded case and to introduce an event or state of affairs unconnected with Merlaw’s breach of trust.

   [40][1999] VSC 84 at para.[10].

Light fittings

1. I come now to items which the appellant claimed by way of addition to the proceeds of sale in the assessment of equitable compensation.  The contract of sale between Merlaw and Terramont included all electric light fittings and provided that the agreed value of chattels was $10,000, which was included in the price.  The chattels, however, also included floor and window coverings, stove, dishwasher etc. as examined and agreed between the parties.  The electric light fittings the subject of the contract of sale were, or included, antique light fittings.  They were excluded from the mortgagee’s sale and Mrs. Nolan said in evidence that they had been returned to her after that sale.  The judge was dismissive of this claim, saying that he did not know by whom the fittings had been removed and did not know their value.  There was no reason to add any sum under this head.  His Honour the Court was told, declined to refer the claim or, it may be, the value of the light fittings to a master.  The appellant’s complaint is that, Terramont having purchased the antique light fittings and possession of them having passed on settlement (that is, Terramont’s assumption of liabilities under the mortgage), Terramont had lost the value of them.  It was said that the light fittings had in essence come back to Merlaw.  The figure of $12,000, being the appellant’s estimate of their value, was sought by way of addition, but in the substitute addendum to the appellant’s notice of appeal it was contended that, in the event that it is held, as I would hold, that the assessment of compensation is to commence with the proceeds of sale of 15 July 1990, a reference to the Registrar of the Court of Appeal should be directed.  I pass by the questions whether the Court has power to direct such a reference on an appeal to it and the Registrar’s power to inquire and report, for, in my opinion, his Honour’s decision should be upheld on two grounds.  First, he was entitled to hold that there is no evidence of the value of the lights.  Secondly, although the removal by the vendor of the antique lights, if that occurred, could constitute a breach of the purchase trust, that was not the breach alleged.  Indeed, the statement of claim does not refer to the topic of light fittings. 

Rent

1. The appellant seeks an allowance for the imputed rental value of Jolimont after Merlaw assumed full possession in April 1989, calculated at $55,000 per annum.  It was said that, if Terramont must “do equity”, it was entitled to an allowance against interest charges which, despite not being in possession, it was required to bear on the ANZ bill facility:  there must be equality of treatment on both sides.   I pass by the questions whether the property would have been let, whether Mr. Burns’ evidence supports the rent figure put forward and whether, on the assumptions made, Merlaw would be liable only for one half of the rent since Terranol, with which it was associated, was at all times entitled to possession of the upper floor of Jolimont.  The rent sought is claimed to run from the date when it is asserted that Mr. Ian Collie and Terramont were excluded from possession or alternatively the date when it is asserted their interest was denied by Mr. Nolan and Merlaw to the bank.  The terminal date is the date of sale by the bank as mortgagee.  His Honour declined to allow this item of addition.[41]  The short answer to the appeal against his Honour’s decision on the point is that given by his Honour, namely, that, as I have earlier explained, this claim is nothing to do with the breach of trust found by his Honour or indeed with the case pleaded for the appellant. 

Miscellaneous

[41][1999] VSC 84 at para. 15.

1. Although there is in Grounds 9 and 12(a) and in the appellant’s outline submissions a complaint about the allowance by way of credit to Merlaw of the amounts paid by it in reduction of the Terramont overdraft the supplementary submission on quantum and the substituted addendum to the appellant’s notice of appeal do not challenge that credit and no oral argument was addressed to it.  I take it not to be in issue.  There is also a complaint in the appellant’s outline of submissions that the appellant received no credit for the value to Merlaw of the security interest which the title provided.  The supplementary submission on quantum acknowledges that this is unquantifiable.  There is no finding or evidence to support the claim nor is it established that by reason of the breach found to have occurred Merlaw received some additional benefit. 

Interest

1. Finally, there is in paragraph 27(i) of the appellant’s outline of submissions a complaint that it was required to give credit for interest on damages from July 1990 to the issue of proceedings in February 1991 (in fact the correct date is 26 March 1991).  A footnote shows that the reference is to paragraph [17] of his Honour’s second judgment,[42] where in allowing interest under s. 60 of the Supreme Court Act 1986 the judge pointed out that the interest ran from the date of commencement of the proceeding. It is true that in two written submissions filed in February and March 1999 the appellant had claimed penalty interest under the Act from 6 October 1989 or 18 July 1990 in the alternative, both dates being before the commencement of the proceeding. His Honour could not have allowed interest under the Act from either of those dates.

   [42]The reference is therefore not to para[16] of that judgment, where under the heading “Nolan Group Interest” his Honour declined to allow a claim for interest from 6 October 1989 to July 1990 to compensate for Merlaw’s disavowing Terramont’s interest in Jolimont while the latter had to pay interest and fees under the mortgage to the bank.  Although this claim is similar to that discussed in the text none of the appellant’s documents appear to refer to it and it is not the subject of a ground of appeal.

1. Counsel for the appellant informed the Court that penalty interest had been sought from the judge from April 1989, though that does not appear in either of the sets of submissions on the question of interest to his Honour.  In any event, counsel submitted to the Court that interest should run from Terramont's “deprivation”, from July 1990 at the latest or alternatively April 1989.  He was not asking, he said, for interest at the penalty rate, but for some interest.  Reference was then made by the bench to the rate of interest awarded against trustees.  It seems that as a result of that intervention the appellant was prompted to seek equitable interest in the substituted addendum to the appellant’s notice of appeal and in his substituted submission in reply.  In the latter document interest was sought from the date as at which the equitable damages are assessed, which I hold should be 18 July 1990, until the date of commencement of proceedings.  It was submitted that Merlaw had either not acted in good faith or been guilty of gross negligence and that interest should be ordered at the higher mercantile rate.  It had earlier been submitted orally for the appellant that, as it was seeking a reassessment of compensation, it should be able to obtain the correct type and quantum of interest even though the question of interest had not been raised as a ground of appeal.  It was pointed out for Mr. Nolan that only statutory interest had been sought in the writ and from Byrne, J. 

1. Leaving aside the question whether the type and quantum of interest can be corrected even where, as I would hold here, the appeal otherwise fails, with some hesitation I think that we should not entertain the claim for equitable interest, having regard to the facts that only statutory interest was sought at first instance, that it was sought from a commencing date which was not open, that the claim for equitable interest has been raised very late and that the act which gave rise to the right to equitable compensation, namely, the signing of an “all moneys” mortgage, was not, in my view, done in bad faith or with gross negligence, whatever might be said about other conduct of Merlaw outside, as I have held, the purview of this proceeding. 

1. For the foregoing reasons I would dismiss this appeal. 

Collie	Merlaw	Judgment
1	SALE PRICE	$750,000.00	$750,000.00	$750,000.00
2	Less SALE COSTS	$20,632.00	$20,632.00	$20,632.00
3	Less ANZ Facility	$300,000.00	$300,000.00	$300,000.00
4	Less TERRAMOUNT OVERDRAFT (at 30/6/90)	$25,017.00	$25,017.00	$25,017.00
5	Less BALANCE OWING UNDER CONTRACT	$10,000.00	$10,000.00	$10,000.00
6	Less MONIES RE:  OGGE MORTGAGE (i)    Ogge Mortgage       Costs (ii)   Final Interest       Payment	Nil Nil	$5,207.10 $9,867.48	Nil Nil
7	Less MONIES Re ANZ (i)  Bill Facility      -  interest costs. line fees and        charges (ii)  Overdraft      Compounding of interest      18 July 1989 to 21 July 1990	(a)  Nil (Dec 87–      Mar. 89) (b)  $19,291.24      (Mar 89 to July       89) $45,512.00	(a) $52, 412.62 (b) $19,291.24 $82,792.56	$44,021.62 $19,291.24 $83,801.39
8	Less Repairs	Nil	$3,721.85	Nil
9	Less Rates	Nil	$8,367.28	$8,367.28
10	Less Property Maintenance	Nil	$12,237.00	Nil
11	Less ANZ Mortgagee Costs	Nil	$8.640.47	Nil See Item 12
12	Less Terramont Overdraft – Additional payment by Merlaw	Nil	$53,300.00	$53,300
13	Less Loss of use of monies Interest borne by Merlaw	Nil	$111,944.93	Nil
14	Add Light Fittings	$12,000.00 (Est.)	Nil	Nil
15	Add Rent	$21,542.00 or $64,167.00	Nil	Nil
16	Add Nolan Group Interest Credit	$6,250.00	Nil	Nil

Net Proceeds of Sale          $185,569.47

50% share of Terracol        $92,784.74

VINCENT, J.A.:

1. I also agree with the judgment of Batt, J.A. which I have read in draft form.

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